Weekly review: Graphite electrode is rising steadily, epidemic affects purchase and shipment (3.18-3.24)

This week the domestic graphite electrode market is rising steadily. After the leading manufacturers focused on raising prices last weekend, a number of small and medium-sized manufacturers also followed up this week, with a range of 500-1000 yuan/ton. At present, UHP450mm specifications with 30% needle coke mainstream market price is 24500-25000 yuan/ton, UHP600mm specifications market price is 27500-28500 yuan/ton, UHP700mm specifications market price is 32000-33000 yuan/ton.

From the actual transaction situation, the recent steel market demand has been significantly restrained by the epidemic. In addition, some short-process steel plants have prepared incremental goods in advance in February,graphite electrode inventory can be used at least in late April. Therefore, the wait-and-see attitude is maintained temporarily, and high price grade trading volume is limited.

Although the recent epidemic has affected the procurement and shipment of electrode manufacturers, most manufacturers are still relatively confident in the second quarter of graphite electrode market，oil prices are unlikely to fall in the short run and under the condition that EAF steel plants operating rate is not high, electrode price has maintained an upward trend. Once steel demand improves in the second quarter and operating rate rises, it is expected to drive electrode market. The short-term graphite electrode market is expect to run stably at a high level, in order to digest the early rise. 

ICC China graphite electrode price index (March 24)

Raw materials

Affected by the larger-than-expected decline in U.S. commercial crude oil inventories, international crude prices had strengthened again this week, and Brent oil prices recovered to above $120 on Thursday. Driven by this factor,  domestic raw materials prices rose steadily this week. Petroleum coke price of some leading manufacturers in Northeast China increased again by 300 yuan to 6500 yuan/ton . The quotation of leading manufacturers of oil-based needle coke in Shandong remained at 12500-13500 yuan/ton, and graphite electrode price support remained strong.

Steel demand

This week the domestic steel market transaction is still flat, the price mainly with small fluctuations. Affected by the epidemic situation and tax reform, scrap steel continued the situation of tight goods and high prices, resulting in EAF steel plants loss has expanded. According to the statistics, the capacity utilization rate of 135 EAF steel plants production was 53.19% this week, down 0.09% from last week; The situation of long-term process is relatively good, and the output continues to rise steadily. This week, graphite electrodes total demand in steel industry increased by 0.87% month-on-month.

Non steel demand

This week, the domestic industrial silicon price showed a high trend of decline. Downstream users received few goods in high price areas, and some manufacturers were more willing to cash out by selling goods, with a cumulative decrease of about 1000 yuan compared with last weekend. As profits of some small and medium-sized silicon plants shrank sharply, the production pace has also slowed down. This week yellow phosphorus market has stopped falling, due to the shortage of upstream phosphorus ore resources, the market focus moved up again downstream users’ inquiries were more active, and the market mentality was good.

Future forecast

Recently, the international oil price has been running at a high level, epidemic has led to the rise of transportation costs (the tension of national VI vehicles), which still plays an obvious role in supporting graphite electrode price. At the same time, the recent production increase of long-process steel plants is more obvious, offsetting the impact of loss and limited production of EAF steel plants to a certain extent, and graphite electrodes total demand  increased steadily. However, due to the current intensification of epidemic prevention and control and the number of private real estate enterprises in credit crisis has expanded to 24, leading to lower than expected demand in the steel market, the market wait-and-see atmosphere is strong, thus affecting its acceptance of raw material prices. Domestic graphite electrode prices are expected to be stable in the short term, follow us to get the latest GE news.